IRS needs funding to better fight refund fraud

Mar. 5, 2015
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IRS commissioner John Koskinen

Written by

John Koskinen

Fighting refund fraud caused by identity theft is a top priority for the IRS. It's a major concern for me and for our employees. We have put in place an aggressive strategy to prevent fraud, investigate these crimes and assist taxpayers victimized by identity thieves.

We have made significant progress, but we understand this is no comfort to victims and need to do more. Congress can help the IRS in this effort as well. Here's a sampling of what we've done:

• Pursuing criminals. Since 2013, we've started more than 2,500 criminal investigations into identity theft and refund fraud. More than 1,000 have been convicted, with average jail time topping 40 months.

• Helping victims. We understand the frustration of victims. Last year, we resolved more than 826,000 cases. We sharply reduced our backlog of cases, dropping to 71,000 from 130,000 a year earlier.

We provide victims a special hotline for assistance. This works better than assigning one employee to a case; our approach does not depend on the availability of a single IRS employee who might be unavailable because he or she is away or assisting someone else.

Unfortunately, new schemes continue to emerge, including from global organized crime syndicates.

Congress cut funding

However, Congress has cut IRS funding by $1.2 billion since 2010, resulting in a workforce reduction of more than 13,000. That means fewer employees to detect fraud, investigate criminals and help victims.

The administration's 2016 budget calls for giving us new tools and more resources. Congress can help by approving this funding and changing the law to speed up the due dates of third-party information returns, such as W-2s that verify wages, so we could detect errors on returns more quickly and spot potential fraud and identity theft earlier.

This work will continue. We remain committed to increasing our efforts and assisting victims, but we need help to continue our progress and win this battle.